Starboard urges Office Depot to sell off interest in Mexican unit

By Katherine Boccaccio

Boca Raton, Fla. -- Office Depot largest shareholder Starboard Value said Wednesday it sent a letter to the office supply retailer’s board, urging it to sell its 50% joint-venture interest in the Office Depot de Mexico business as soon as possible.

Starboard, which owns a 14.8% stake in Office Depot, said it believes the value of the JV interest is not fully reflected in the retailer's stock price.

JV partner Mexican retailer Grupo Gigante has offered $687.34 million for Office Depot’s half. That offer expires on Thursday, and an answer will require consent from OfficeMax under the terms of the office supply pair’s recently announced merger deal.

"If OfficeMax does not consent to Office Depot's negotiations with Gigante or any other potential buyer regarding the sale of the JV Interest, Starboard would view this as both unreasonable and potentially anti-competitive," the shareholder said in the letter.